ROYG STAGGERS FORWARD IN FIGHT AGAINST CORRUPTION

C O N F I D E N T I A L SECTION 01 OF 02 SANAA 000041

SIPDIS

E.O. 12958: DECL: 01/07/2016
TAGS: ECON EFIN KMCA KMPI PGOV PINR PREL YM ECON COM
SUBJECT: ROYG STAGGERS FORWARD IN FIGHT AGAINST CORRUPTION

REF: A. SANAA 3610

B. SANAA 207948

Classified By: Thomas C. Krajeski for reasons 1.4 (b) and (d).


1. (C) SUMMARY. Yemen's Cabinet approved a new
anti-corruption law, calling for the creation of an
independent High Commission for National Corruption. Neither
the extent of the Commission's powers nor its relationship to
existing ROYG institutions -- or the newly created
anti-corruption role for the National Security Bureau -- is
entirely clear at this time, but the Cabinet suggested that
it will have broad authority to investigate and prosecute
crimes. The proposed law is part of a hurried response by
the ROYG to growing calls for reform from donor countries,
and is one of a number of initiatives on the table.
Corruption is rising to the top of the ROYG's policy agenda,
but it is not yet evident if President Saleh is ready to
truly take aim at Yemen's corrupt elite. END SUMMARY.

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A Small Law for a Big Problem
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2. (C) On December 27, Yemen's Cabinet approved a new
anti-corruption law implementing President Saleh's call for a
new, independent High Commission for National Corruption.
The proposed law is vague on specifics, but appears to give
the new body power to investigate and prosecute cases of
wrongdoing. If approved by Parliament, the Commission would
have jurisdiction over crimes involving payroll,
embezzlement, forgery, bribery, smuggling, money laundering,
and tendering. The Commission would operate alongside
existing anti-corruption institutions, including the Central
Organization for Audit and Control (COCA) and the National
Anti-Corruption Committee, both based in the President's
Office. Some officials at the Ministry of Planning told
Econoff that they were unclear what would be the respective
powers of overlapping anti-corruption bodies.


3. (SBU) The Cabinet proposed that the Commission consist of
nine members serving five-year terms, chosen by the President
from a list of 20 candidates recommended by Parliament. The
law also empowers the President to appoint an Executive
Manager and a Deputy Manager directly, and notes that the
Commission will have power "equivalent to the Ministry of
Finance." The anti-corruption body is to operate with
financial independence, but the Cabinet declined at this time
to say by what mechanism this would occur. There are a
number of other obscure references to the need for bilateral
agreements with other countries in order to investigate
financial crimes. The text indicates that the ROYG will
clarify these issues in future bylaws.

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ROYG Anti-Corruption Efforts "A Failure"
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4. (SBU) This is the latest in a series of declarations by
the ROYG that it is cracking down on corruption. The
announcement followed an increasingly hard line on the part
of donor countries against government corruption, and it is
clear that the new initiatives originate with the President.
(Ref A) At a recent corruption conference for members of COCA
and the judiciary, Presidential Office Manager and Director
of the National Security Bureau (NSB) Ali al-Anissi declared
current ROYG efforts to combat corruption a failure. COCA
reports have not resulted in any legal consequences, he said,
and pointed to the High Tendering Board (HTB) as the "center
of all corruption." (NOTE: The HTB is headed by the Prime
Minister and thought to be under the control of the Minister
of Finance. END NOTE.)


5. (C) Anissi explained that the new commission would differ
from existing ROYG institutions in that "it will prevent
corruption before it happens." He did not expound on how the
Commission would accomplish this goal. Anissi also hinted at
the creation of a new anti-corruption unit within the NSB,
but did not specify its mandate. (NOTE: Ammar Saleh, the
President's nephew, is the de facto head of the NSB. END
NOTE.)

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Saleh Not the Answer
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6. (C) COMMENT: The ROYG's recent surge of activity indicates
that President Saleh was shaken by tough talk on corruption
during his recent visit to Washington. (Ref B) Saleh feels
the need to placate the USG and other donors, who are growing
increasingly impatient with the slow pace of reform. The
scattershot approach taken by the ROYG, however, does not
provide clear remedies at this stage. The new
anti-corruption law offers the possibility of prosecuting
corrupt officials, but is more an exercise in brainstorming
than meaningful legislation. Claims of independence for the
new High Commission for National Corruption appear
exaggerated, with the President maintaining considerable
power over key personnel. The NSB's proposed role in
combating corruption is a somewhat ominous development,
expanding Saleh's power over judicial functions. In general,
the ROYG continues to labor under the misconception that the
President will personally provide a solution to Yemen's
corruption, when in fact he is part of the problem. END
COMMENT.
Krajeski